Business Health Check - Assignment

Business Health
Check

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
1.1 Objectives of the Businesses.................................................................................................3
1.2 Factors that impact on the business .....................................................................................4
1.3 Potential improvement to the business organisation and operation......................................7
M1 SMART objectives...............................................................................................................8
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements.8
TASK 2............................................................................................................................................9
2.1 Effectiveness of the business................................................................................................9
2.2 Develop plans to improve the business, justify their value.................................................10
M2 Evaluate how the effectiveness of areas of the business stipulated...................................11
D2 Critically analyse how the plans developed in can lead to an improvement.......................11
TASK 3..........................................................................................................................................11
3.1Current skills of management staff......................................................................................11
3.2Plans for the development of skills for management and staff............................................12
M3 Analyse the effect current experience, skills and abilities of management and staff.........12
D3 Methods that can be used to develop the skills of management and staff.........................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business health check-up is known as activity where business organisations evaluate
complex environment so that appropriate alteration with objective to make business flourish and
successful. It can also be helpful for evaluation of company at regular basis as this helps in
identification of problems which can be resolved that are putting negative impact on
sustainability and growth of business. To have deeper understanding of this topic McDonald has
been chosen. This is one of leading fast food chain industry in hospitality sector which was
founded in year 1940 by Richard and Maurice McDonald's . this company carry out its business
operations at international level offering variations in their products some of them are
hamburgers, French fries, milkshakes, wraps and so on. In this report it has been discussed about
environment of company by conducting PESTEL, SWOT and porters five forces model. Also,
for further improvement in business Ans-off's growth matrix has been discussed. Along with this
effectiveness will be reviewed and plan for improvement is designed. In the end, current skills of
both management and staff will be discussed along with creation of development plan for
improvement of skills (Abdelhak, Grostick, and Hanken,2014).
.
TASK1
1.1 Objectives of the Businesses
McDonald's is successful American Fast food chain company which established its
operations in 1940 by Richard and Maurice McDonald's. It is Headquartered at San Bernardino,
California at United States. This is worlds largest successful restaurant chain in terms of revenue
as they serve approximately 69 million customers per year in 100 nations and they have around
37855 outlets according to year 2018. they have captured huge market share by providing
customers with cheeseburgers, French Fries, milkshakes and soft drinks at global level.
McDonald's have both long term and short term objectives which adopt to be successful at
worldwide level.
Long-term objectives- Their objective is to serve customers with good food in friendly
environment and provide shareholders with good returns (Almahmoud and Doloi, 2012).

Short-term objectives- The company aims to provide products with quality of food as per
standards and renders quick service and create value for money.
1.2 Factors that impact on the business
Business environment is refer to as sum total of external as well as internal factors which
are beyond the control of organisation. The factors which constitutes business environment are
consumers, suppliers, competitors, government, economy and many other aspects. Furthermore,
to analyse and identify impact of internal and external factors various tools are adopted by
managers of McDonald's which are been discussed below:-
PESTEL – This tool is used to analyse about factors of external business environment which
organisation is facing. Their are mainly six factors of Pestle Analyse which comprises of
political, economic. Social, technology, environment and legal which are discussed in relation to
McDonald's are as follows:-
 Political factor – This is inclusive of rules and regulations which are framed by
government of specific nation. Their is negative impact on McDonald's mainly in
European nations as government is taking initiatives with the aim towards improvement
in health and reducing obesity (Arntz-Gray, 2016). The products which are offered by
company consists of high amount of sugar and sodium in food which results in various
health issues like diabetes, heart attack, hypertension and many more. So, to overcome
these diseases McDonald's has now started offering healthy food products such protein
rich smoothies and shakes. Along with this, business operation are affected by tension
between government of various countries.
 Economical factors – This factor have major impact on business operations of
McDonald's at international, local and national level. If country has good economic
conditions than customers will have more disposable income with good spending power.
The operations of McDonald's have negative impact because of exchange rate
fluctuations as major part of raw materials are imported from various countries (Chang,
and et. al., 2016).
 Social factors – Their is negative impact on sales of company because of changing tastes
and preferences of customers. Their are outlets of McDonald's in various countries so

managers decide menu as per their culture and norms. Also, company fulfils its corporate
social responsibility by taking active participation in various social projects.
 Technological factors – technological advancements have positive impact not only on
business processes but also helps in enhancement of productivity and efficiency. The
infusion of technology for carrying out operations of Mcdonald's helps to add and
increase quality of food products. For instance, McDonald's have proper and effective
supply chain management and inventory management system which helps in increase
effectiveness for company (Ghaddar, and et. al.,2012).
 Environmental factors- Now government have started focusing on environmental
protection and which is sustainable in nature. McDonald's have started emphasising on
environment friendly and effective supply chains so as to cater huge market share. Also
more concern is shown while framing policies which are more environment friendly.
 Legal factors- The legal framework have direct and major impact on business
organisation. The companies perform their operations properly if legal environment is
free from bureaucracy and red tape as this makes it difficult for McDonald's to carry out
their operations. For instance, in several companies zero working hours policy has been
adopted which helps in increasing employee morale and commitment.
Porter's five forces – This model was propounded by Michael Porter in 1979 which consist of
five forces which shape the overall level of competition in this industry. Further, these sources
are described in relation to McDonald's are as follows:-
 Bargaining power of suppliers – The bargaining power of suppliers is low as there are
numerous suppliers as mainly raw material required for production that is chicken and
potatoes which are used for purpose of production. Also there are number of suppliers
who wish to supply raw materials to McDonald's. Thus, position of suppliers keeps on
changing as they are in no position to bargain for increasing price.
 Bargaining power of buyers – The bargain power of buyers of McDonald's is strong as
there are many options which are available in market. If customers are not satisfied than
they shift from one brand to another. As there are many competitors so brand loyalty of
customers is decreasing day by day (Goins and Pye, 2013).

 Rivalry among existing firms – one of most competitive industry in todays business
environment is fast food. There are ample of competitors available for McDonald's so
there is high degree of rivalry which are concerned with respective business firms some
of them are johnny rockets, Wendy's and many other local restaurants.
 Threat of new entrance – there is medium degree of threat of new entrants to
McDonald's as there is huge requirement of funds and resources before entering into fast
food industry. Their is worldwide presence of McDonald's and has low level of threat
from competitors as their chances as low.
 Threat of substitute products and services – there are many substitute products
available in market so there is threat to McDonald's as there are various organisations
which offer close substitute products like KFC, burger, pizza and so on. Also, there is
low brand loyalty because consumers are easily switching their brands. Therefore, there
is high degree of threat of substitute products and services (Henrich, Hinman and Killius,
2013).
SWOT analysis – This analysis comprises of internal factors which includes strengths,
weakness, opportunity and threats. In context of McDonald's these factors are described briefly.
Strength Weakness
 McDonald's has strong brand image
and brand loyalty as company offers
large range of products.
 The products of McDonald's are
prepared with proper hygiene and
effective and hassle free services are
rendered to customers.
 McDonald's business operations are
spread all around the world and is not
confined to one currency or economy.
 One of the major weakness is their
environmental issues because
McDonald's utilise HCFC-22 for
making polystyrene which result in
ozone depletion .
 There is limited range of products
which are available for vegetarians and
vegan customers.
 Their major weakness is that fast food
is considered as unhealthy as this leads
to many diseases and health issues.

Opportunity Threat
 McDonald's can grab opportunities and
expand its businesses at international
level.
 To target various consumer groups
McDonald's uses CRM and database
marketing which helps to prevent brand
switching.
 The managers of McDonald's
emphasises on corporate social
responsibility and reducing negative
impact on environment.
 Their is reduce in market share of
McDonald's as there is increase in
number of competitors in the market.
 The operations can be affected by
recession and continuous fluctuations
in economies.
 Their is much emphasises given by
food regulatory bodies which affect
business of McDonald's.
1.3 Potential improvement to the business organisation and operation
Ans-off's matrix is known as planning model which is concerned with marketing and
helps businesses in determining products along with market growth strategy
(Hyppönen,Hämäläinen and Reponen, 2015). Also, this model is important for strategic planning
for marketing and can be executed for grabbing opportunities in view to earn profit by
development of products and services for capturing new market share. Ans-off matrix comprises
of four different growth strategies which is discussed in context of McDonald's as follows:-
 Market penetration – This growth strategy is concerned with increasing growth by their
existing range of products in their existing market segment with objective to increase
market share. Also, market penetration has lessor degree of risk as it provides leverage to
many firms with their existing competencies and resources. This market growth strategy
is not effective for McDonald's because after some time their product range leads to
decrease level of satisfaction among customers (Joshi, and Cheung, 2015).
 Product development – In this, Organisation develop new product by targeting their
existing market segments. Their will be low degree of risk for company because they
are aware about their customers taste and preferences so they will develop new product as

per their requirement. For McDonald's product development strategy will be suitable for
growth and development. They are bringing innovative category of healthy burger for
raising their product sale by 30% more.
 Market development - It is growth strategy in which business firm sell their existing
product within new market area. But market development is more risky as compare to
market penetration because there is need to target new market segment. McDonald's is
not using this growth strategy as it has very high degree of risk as in this stage customer's
are of several nations with different taste and preferences (Laws, 2015).
 Diversification – In this growth strategy company come up with new product in new
market segment. Diversification is more risky strategy as company is planning to go in
that market where they don't have any experience and have little knowledge about it.
McDonald's is not employing diversification growth strategy as it is expensive, time
consuming and associated with high degree of risk.
McDonald's has adopted product development strategy for both growth and development
purpose. In this will come up with new innovative product that will be healthy variant in burger
which will be helpful in increasing sale by 30% in existing market area.
M1 SMART objectives
SMART is referred to as mnemonic which provides criteria for setting objectives.
Therefore, objectives must be specific, measurable, achievable, relevant and time-bound.
SMART objective of McDonald's are as follows:-
1. To raise profits of company by 15% by the end of 1 year by making use of robust
promotion.
2. To increase sales of entity by 9% by the end of 6 months by making use of social media
marketing.
3. To Introduce new range of healthy burger within 8 months in order to enhance product
sale 30% more.
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements
Their is effective contribution by elements of Ans-off Matrix in performance
improvement of business of McDonald's (Philbin, and Kennedy, 2014). It has been analysed that
application of this model have allowed McDonald's In identification of new strategies and

tactics by which their performance can be improved and lay down positive impact. Further, it can
be said that company can easily influence customer's interest by adopting product development
strategy as this is concerned with providing variety of food items. Also, this will directly increase
sales of McDonald's in existing as well as new market with increase in productivity and
profitability.
TASK 2
2.1 Effectiveness of the business
As per the current scenario of organisations, their business always refers to the better
output which is based on the task that is completed by the workers and employers. In reference to
the McDonald's effectiveness of business depends on their manager and leaders because they are
one who always support their team members towards achieving their business goals. Wherein
effectiveness define specific point in which few points have objectives and goals as well as
degree to achieve the particular target in a proper manner (Porter and Tanner, 2012).
Products and services: In order to make effective process of business from any
company and any kind of service sector which provide goods and services to consumer's. That's
why this situation make it attractive in front of the customers and they can get more awareness of
product in a proper way. In context with McDonald's, which deals with different products such
as chicken, hamburgers, smoothies, sandwiches and so on. All these products made by this
company to accomplish customer's requirement in the marketplace. It also helps in order to
enhance the profit with effectiveness in the business concepts.
Marketing: This term refers to the different types of distribution of goods and sales as
well within the working sector. According to the respective company McDonald's, they are using
various kind of strategies and techniques in order to enhance their business at more level. With
the help of this, they can get higher achievements n the competitive advantage in a proper way.
These kind of strategies are very much beneficial for the management of this company because
they can easily find out the consumer's requirement at competitive era of working place (Robson
and et. al., 2017).
Sales: According to this term, McDonald's, is using various kind of factors which are
includes in the different things like discount, effective bonus points etc. so that customer's
attracted from this scenario that increase the company sales in a proper way. On the basis of

these strategies company can enhance their effectiveness of business that always enhance the
good sales revenue and profits.
Financing: It is very essential for each company and it shows the effectiveness of funds
of an organisation. Therefore, McDonald's should totally have every information in relation with
the finance or budget of the company. As this organisation is having different type of strategies
which makes them very effective so that company can run their business in a smooth manner.
2.2 Develop plans to improve the business, justify their value
It is kind of written document which is always consider about methods, tools and techniques and
objectives as well as goals that helps to achieve goals within the particular time framework. In
reference to the McDonald's business plan has been developed through the management of this
company in order to check their product viability in different areas (Saaty and Vargas, 2013). If
company want more improvement in their business so that they can bring new concept named as
health burger, for this they are following few factors are given below:
Planning marketing: According to this factor, management of this organisation will plan
to use effective and unique business strategies for the better changes in their product. In order to
make effective their products they will definitely use different kind of techniques in order to
check the customer's requirement and demand within the market place. As per this they will
target customer's according to their demand. For better marketing plan they will advertise their
product by using social media, online websites it will enhance the awareness about product in
consumer's mind as well as will shows the affectivity of this company.
Sales and productivity: As per this, company will make plan to change their policy and
pricing strategy like hey can apply discount strategies on their product. It will be benefited for
the customer's and also enhance the organisation's sales in a proper way. For more sales and
promotion of products they will use TV., online aids, newspaper and so on.
Financial management systems: McDonald's will make plan in order to increase their
sales and productivity within the marketplace. This company will make sort of plan in which
they can implement on their innovative ideas and thoughts which will be good for financial
management and also influence production activities in a right manner. Manager of this company
will apply financial budget on their new product that Healthy burger it will affect people in a
good way (Shermon and Gilmour, 2016).

Roles and responsibilities of staff and management: As per the above scenario roles
and responsibilities will allocate to this company's staff members in order generate different sales
and pricing strategies in a good way. As per this sales department of this organisation will apply
affordable price on their product in order to make them effective as well it is the opportunity to
grab customer's a lot (Abdelhak, Grostick, and Hanken,2014).
Planning performance monitoring: According to this stage, McDonald's will have plan
to control their organisation like employee's performance and staff members in order to bring
some changes in a proper way. For making organisation better organisation will find out the
performance of employee's and will compare to standard performance after that it will evaluate
or consider them according to their opinion. With the help of these sort of tools will helps
company to understand their employee's performance in an effective manner.
Therefore, this can be said that all stages of business planning are much valuable as they
are providing new ideas in order to increase growth of McDonald's in a proper way.
M2 Evaluate how the effectiveness of areas of the business stipulated
According to the all area which are covered in the business that really create effective
contribution in order to increase the growth of an organisation when they are participating in this.
Wherein, goods and services are the huge aspects that also helps in making proper business. In
reference to the McDonald's, their future development is only based on the marketing activities
in which they can get ideas about all kind of functions like finance, sales, marketing etc
(Almahmoud and Doloi, 2012). this concept also helps to promote their product by having
accurate information about cash flow, fund etc. therefore, it evaluate the effectiveness of
business area in a perfect way.
D2 Critically analyse how the plans developed in can lead to an improvement
Business plan always develop the good changes with in the organisation as well as
increase the growth of business in an effective manner. In context with McDonald's have several
kind of plan to make their business operations effective. For an example, like if management
system of an organisation have plan in order to make innovative existing product as per the
consumer's choice that will be beneficial for the customer's in the market. Wherein, marketing
plan is also fruitful for this company to generate effective changes for employee's as well as team
workers in order to increase their performance in the management.

TASK 3
3.1Current skills of management staff
Within the organisation, there are lots of skills and aspects in order to fulfil the task or
target in a proper way at working place (Arntz-Gray, 2016). According to the MacDonald's they
are following different type of skills in order to provide effective system for their employee's and
staff members to achieve goals. There are some skills, are given below:
Technical skills: It includes in the different type of skills and knowledge which is always
needed to perform the specific activity. In reference to the McDonald's that mainly refers to the
knowledge, information, ability to think etc. these skills are needed to keep maintain Eveready
activity such as bills, customer's service problem.
Operational skills: It shows the ability in which people are always able to resolve their
customer's issues in a proper way within the business firm. In context with, McDonald's they
used several techniques in order to fulfil customer's requirement. For this they are using good
communication skills in order to influence their customer's effectively. With the help of this they
can make effective management skills to run business activities properly.
Managerial skills: It considered those skills in which manager is required to use
effective organisation objectives in a proper way. In context with McDonald's they are
conducting some research, planning, communicating in order to make effective decision for the
company (Chang, and et. al., 2016).
Current skills: As per this every company has enough staff members in order to operate
their business functions in a perfect way. Along with this, they make good contribution to make
business plan in a better way. In context of McDonald, there are few actual skills which are
having by the employee's or staff members of this organization. They are given below:
Decision making- It shows the ability in the actions plan. In reference to the
McDonald's, their manager has right to take decision for better growth.
Problem solving- It helps in order to resolved the issues regards with anything into the
market. Wherein, McDonald's have sort of employee's who always ready to resolved the
customer's issues.
Communication skill- As per this people can easily talk with each other as it is the
transferring system from one people to another. On the basis of this McDonald's also have
effective skills and ideas which shares with their employee's in an effective manner.

3.2Plans for the development of skills for management and staff
The development plan is written document that describes about future expectation of
employees along with planning for developing their skills which will further assist in achieving
their goals and objectives (Ghaddar, and et. al.,2012). Their are various skills which are
necessary for their staff and management which help them in performing their obligations in
effective and helpful in accomplishing their goals and objectives. Therefore, outline for future
development of staff and managers at McDonald's is given below:-
Learning objective Target
proficie
ncy
Development opportunities Time scale
Risk management 10 The business environment consist of
various risk and factors which lay down
either direct or indirect impact on working
of organisation (Joshi, and Cheung,
2015). So, to avoid such type of hazards
management of risk is essential. To
minimise risk proper market analysis and
plan is to made by taking into
consideration various risk factors.
Therefore, market analysis is the only tool
by which risk can be known and plans can
be made accordingly.
80 to 90 days
will be required
for developing
risk management
skills.
Planning skills 10 Their are various activities which are to be
performed on regular basis in organisation
for which planning is required so that there
is effective management. Therefore, there
is requirement for developing planning
skills in staff and their management as this
will lead to conduct activities in effective
50 to 75 days
will be required
for developing
planning skills.

way.
Situation analysis 10 Business environment is dynamic in nature
as various situations may emergence
within it. So for analysing these situation
and responding them in effective manner
there is necessity of developing situational
analysis skills in staff members and
management of McDonald's (Goins and
Pye, 2013).
40 to 70 days
will be required
for developing
situational
analysis skills.
M3 Analyse the effect current experience, skills and abilities of management and staff
Employees and management of McDonald's possess various present skills, competencies
and experience which assist them in carrying out their day to day operations in efficient manner
and is responsible for long term growth of organisation. Moreover, skills and knowledge lay
down positive impact business operations of McDonald's as they maintain satisfaction of
customers and generate high returns on investment. Also, complete knowledge about technical
and operational aspects are very important for effective productivity and profitability. Lastly
staff members and managers will be able to use their decision-making and problem-solving skills
to take proper decisions along with various alternatives (Henrich, Hinman and Killius, 2013).
D3 Methods that can be used to develop the skills of management and staff
There are various tools which can be adopted by McDonald's for developing skills of
both management and their staff members. Various methods are been described below:-
 Workplace training – As per this method skills are developed on the job. This is most
appropriate method as employees and managers of McDonald's will enhance their skills
by doing more of practical work. The major drawback of this method is that it will create
obstacles for other people working in organisation.
 Individual training – In this method training is provided to both employees as well as
managers by putting proper attention on individual person. This method is beneficial for
individual members as this help in learning new things in effective way. Further this is
very time consuming process as it continuous for time period which is not specified.

CONCLUSION
From the above report it can be concluded that it is very much essential for business
organisation to keep checking their business health on periodical basis. So that they are capable
enough to identify strengths and overcome threats in effective manner. Also, it is important that
for solving any problem it is necessary to execute and plan for changes as per necessary
requirement. Along with business environment is assorted in two parts that are external and
internal factors which lay down major impact on operations of company. Therefore, for
analysing impact of various factors business organisation make use of several tools such as
SWOT, PESTLE and porters five forces model. As every business want to grow and develop so
they can adopt Ansoff Matrix which is related to product development and market growth
strategy. Lastly, in order to enhance growth and development different areas of organisation can
be improved with the help of Development plan.
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